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If low-end rents double, building housing looks a lot more attractive.

by ISL 4y ago

polygamous_bat 4y ago
Except current landlords have local governments in a stranglehold and you can't build any new housing at all.
- sologoub 4y ago
  That’s not the entire picture -Builder’s Remedy apperently is working: “ For example, after Santa Monica failed to pass a compliant housing development plan, developers employed the builder's remedy to move forward with the construction of approximately 4,000 new housing units spread across 12 new development sites.” https://en.m.wikipedia.org/wiki/Builder%27s_remedy https://en.m.wikipedia.org/wiki/Builder%27s_remedy That’s nearly an 8.8% increase from the current 45,487 units total (including all houses) https://scag.ca.gov/sites/main/files/file-attachments/santa-monica-he-0421.pdf?1620767629 https://scag.ca.gov/sites/main/files/file-attachments/santa-...
  - catiopatio 4y ago
    It’s “working” insofar as it represents a giveaway to value-extracting development interests, nearly all of which seek to grow the permanent renter class. It remains to be seen whether that will reduce housing costs.
    - sologoub 4y ago
      Santa Monica is one of the most desirable areas in greater Los Angeles. I doubt the demand for it is that shallow. However, this helps more people (who are likely well off) to afford it and reduce pressures elsewhere. If your goal is a paid off place to live, SM isn’t the best choice unless you are either high income already or are set to receive a windfall somehow.
Spooky23 4y ago
Low end rents are already really high and subsidies set a price floor. A two bedroom hovel in my city nets about $1200 section 8 voucher. A two bedroom in a nice development in the burbs is about $1300, and includes parking, pool and gym. Landlords are like oil people, it’s all about extractive value. You want to pump the most cash possible with the minimum overhead possible. Building housing gets attractive only when the government subsidizes construction through low rates and rapid tax depreciation. A relative was the lead on development of a $18M hotel. He probably has $750k in. Most of the money is made with accelerated depreciation. The hotel itself is an afterthought, you couldn’t build it without the backend tax subsidy.
analog31 4y ago
From what I've read, low income housing is actually more profitable for landlords.

If low-end rents double, building housing looks a lot more attractive.

by ISL 4y ago

If low-end rents double, building housing looks a lot more attractive.

polygamous_bat 4y ago

Except current landlords have local governments in a stranglehold and you can't build any new housing at all.

sologoub 4y ago
That’s not the entire picture -Builder’s Remedy apperently is working: “ For example, after Santa Monica failed to pass a compliant housing development plan, developers employed the builder's remedy to move forward with the construction of approximately 4,000 new housing units spread across 12 new development sites.” https://en.m.wikipedia.org/wiki/Builder%27s_remedy https://en.m.wikipedia.org/wiki/Builder%27s_remedy That’s nearly an 8.8% increase from the current 45,487 units total (including all houses) https://scag.ca.gov/sites/main/files/file-attachments/santa-monica-he-0421.pdf?1620767629 https://scag.ca.gov/sites/main/files/file-attachments/santa-...
- catiopatio 4y ago
  It’s “working” insofar as it represents a giveaway to value-extracting development interests, nearly all of which seek to grow the permanent renter class. It remains to be seen whether that will reduce housing costs.
  - sologoub 4y ago
    Santa Monica is one of the most desirable areas in greater Los Angeles. I doubt the demand for it is that shallow. However, this helps more people (who are likely well off) to afford it and reduce pressures elsewhere. If your goal is a paid off place to live, SM isn’t the best choice unless you are either high income already or are set to receive a windfall somehow.

Spooky23 4y ago

Low end rents are already really high and subsidies set a price floor. A two bedroom hovel in my city nets about $1200 section 8 voucher. A two bedroom in a nice development in the burbs is about $1300, and includes parking, pool and gym. Landlords are like oil people, it’s all about extractive value. You want to pump the most cash possible with the minimum overhead possible. Building housing gets attractive only when the government subsidizes construction through low rates and rapid tax depreciation. A relative was the lead on development of a $18M hotel. He probably has $750k in. Most of the money is made with accelerated depreciation. The hotel itself is an afterthought, you couldn’t build it without the backend tax subsidy.

analog31 4y ago

From what I've read, low income housing is actually more profitable for landlords.